M&S boss Steve Rowe handed £599,000 bonus despite fall in profits

Iain Lynn

Marks & Spencer boss Steve Rowe has been handed a near-£600,000 bonus despite annual profits tumbling by 64% at the high street chain.

The retail giant's annual report revealed it paid Mr Rowe £1.6 million in pay and bonuses, although all executive directors missed out on share awards under a long-term incentive plan after failing to hit targets.

Mr Rowe, who was promoted to chief executive in April last year, picked up a £599,000 bonus on top of his £810,000 salary and £234,000 in pensions and benefits.

The annual report also showed Mr Rowe could be in line for a total pay package worth up to £4.7 million in cash and shares over the year to next April if all targets are met in full.

His pay details come just weeks after it reported a gloomy set of annual results, which showed profits diving by nearly two thirds to £176.4 million, while sales in its clothing arm also plunged back into reverse.

News of his bonus also follows controversial changes to M&S workers' pay and pensions, although the group has pledged to top up salaries for those worse off as a result of the changes.

The annual report confirmed that Mr Rowe and executive directors waived a 2% pay rise for the second year running "in support of the proposed new pay arrangements being made elsewhere in the UK organisation".

In awarding the annual bonus to Mr Rowe, the group's remuneration committee said it "considered the overall performance of the business and of the executive directors against this, as well as against their individual targets".

It added: "The Remuneration Committee is satisfied that incentive payments for the executive directors reflect both the overall financial performance of the business and the hard work undertaken by the team to achieve this in the challenging environment."

The committee has also made changes to the long-term share incentive scheme for top bosses, including ensuring shares must be held for two years after being awarded.

Mr Rowe has been leading an overhaul at the group, announcing plans in November to close around 30 UK stores and convert 45 more into food-only shops, while also pulling out of 10 international markets.

He has also been focusing on turning around the fortunes in its clothing and home arm, but fourth quarter sales in the division tumbled 5.9%, marking an abrupt end to the revival seen in the previous three months, when sales rose for the first time in nearly two years.